PLDT revives plan to sell Makati assets to support record 2019 budget

Telco giant PLDT Inc. reactivated a plan to sell key property assets, including its headquarters in the heart of the Makati City financial district, to fuel capital spending and growth.

PLDT chair and CEO Manuel V. Pangilinan said the sale of properties and the eventual divestment of its remaining 2.6 million shares in Germany’s Rocket Internet, currently valued at about P3.4 billion, would help support a record P78.4-billion spending budget for 2019.

PLDT, which reported higher profit and revenues in the first quarter of 2019, is ramping up spending to upgrade its fixed and mobile networks and to support growth that is being driven by its core enterprise and consumer segments.

PLDT’s main Makati City assets are the Smart Tower, a 36-story office building along Ayala Avenue, and PLDT’s headquarters, which sits on a roughly 1-hectare property along Makati Avenue.

“It’s an old plan but I’m reviving it,” Pangilinan told reporters. He said PLDT was in talks to partner with the property arm of Japan’s NTT Group, a major shareholder of PLDT.

Moreover, it plans to tap an unnamed publicly listed real estate company to redevelop the property along Makati Avenue, which houses the Ramon Cojuangco Building and the MGO Building. Pangilinan said the new plan could involve the construction of two new office towers.

He said a final decision—and the possible relocation of PLDT’s headquarters—would be made within the year.

The disclosure on asset sales comes as PLDT saw telco core earnings increase 7 percent to P7.2 billion in the first quarter of 2019. Supporting that growth was a 7-percent jump in service revenues to P38 billion and a 7-percent drop in expenses to P31.13 billion.

PLDT underscored further recovery in its wireless business, which saw revenues grow by a whopping 18 percent to P16.9 billion.

Oscar A. Reyes Jr., PLDT senior vice president of consumer market development, said gains were driven by an increase in subscribers to 63.4 million from 57.7 million, improvements to its network and strong demand for video streaming.

During the same period, PLDT’s Enterprise Group also grew 9 percent to P9.8 billion while its Home business segment rose 3 percent to P9.1 billion. Its core business lines helped earnings before interest, taxes, depreciation and amortization (Ebitda) increase 16 percent to P20.1 billion and post a margin of 51 percent.

For the first quarter, PLDT deployed P12.2 billion, or about 15 percent of its full-year spending budget and almost double the amount spent in the same period in 2019.

PLDT chief technology and information advisor Joachim Horn said spending would pick up later in the year and that they expected to deploy the full year budget in 2019.